The difference in one line
Markup is profit compared with the cost. Margin is profit compared with the selling price. Same profit, different base: so markup is always the larger number.
Free comparison
Margin vs markup: what is the difference?
Both measure profit, but against different numbers, and confusing them is a classic way to underprice. Convert one into the other and see the price for your cost.
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Margin
40%
Markup
66.67%
Markup is 26.67 points higher than margin for the same profit.
Selling price£25.00
Profit£10.00
Where the money goes
of £25.00
- Cost of the item 60%£15.00
- Profit 40%£10.00
Margin and markup chart
| Margin | Markup |
|---|---|
| 5% | 5.3% |
| 10% | 11.1% |
| 15% | 17.6% |
| 20% | 25% |
| 25% | 33.3% |
| 30% | 42.9% |
| 33.3% | 49.9% |
| 40% | 66.7% |
| 50% | 100% |
| 60% | 150% |
| 66.7% | 200.3% |
| 75% | 300% |
| 80% | 400% |
| 90% | 900% |
Guide
Margin and markup side by side
An example
Buy for £10, sell for £15. Profit £5. Markup: £5 ÷ £10 = 50%. Margin: £5 ÷ £15 = 33.3%.
Why it matters
If you want a 50% margin and add 50% to your cost, you only get 33.3%. To reach a 50% margin you need a 100% markup: double the cost.
The conversions
- Margin = markup ÷ (100 + markup) × 100
- Markup = margin ÷ (100 − margin) × 100
- Price = cost × (1 + markup ÷ 100) = cost ÷ (1 − margin ÷ 100)
How ProfitClerk works this out for you
- Margin, ROI and days to sell explainedWhat profit margin, ROI and days to sell mean in ProfitClerk, how each is worked out from your eBay sales, and where to see them for an order or a product.
- How your profit on each sale is calculatedSee how ProfitClerk turns an eBay sale into profit: what the buyer paid, less eBay fees, postage label, packaging, item cost, return postage and refunds.
Questions
Is a 50% markup a 50% margin?
No. A 50% markup is a 33.3% margin. A 50% margin needs a 100% markup.
Which should I use to price?
Whichever you are used to, as long as you know which one you mean. Margin is easier to compare with your accounts, because it is a share of sales.
Can a margin be more than 100%?
No. Margin is a share of the price, so it can only approach 100%. Markup can be any size: a £1 item sold for £10 is a 900% markup and a 90% margin.
What about ROI?
For a simple resale, ROI (return on investment) is the same as markup: profit compared with what you paid.
Margin, markup and ROI on every sale
ProfitClerk shows margin, ROI and profit for every order and every product, worked out from your real costs and fees.
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